What a difference a couple of months makes!! Since the last Sparrow Splash in March, the Corona virus has wreaked havoc on the entire world and has disrupted almost everything we do on a daily basis. Coronavirus has pretty much turned the world upside down. Sparrow responded quickly when the issue came up and has remained open with even more safety and health procedures in place. Please keep in mind that the following market information can change very quickly as there are so many factors currently in play.
Chocolate (Cocoa Bean Derivatives)
The bean market has been very volatile with higher prices earlier this year and some easing recently. The big news in the bean market are the butter/powder ratios. With so much economic uncertainty, the demand for cocoa butter (used in making chocolate) is down which is putting upward pressure on the powder market. The other unknown here is how the coronavirus will impact the primary growing regions so this is an area to watch closely. Contracting of cocoa powder through 2020 is recommended.
Compound (Non Cocoa Bean Derivatives)
Compound prices remain firm as sugar prices are firm and with the current coronavirus situation in Brazil there could be additional upward pressure on sugar prices. Overall demand for edible oils is very strong so this ingredient is also putting pressure on many compound products. As mentioned earlier cocoa powder prices are firm so any compound products using cocoa powder could see additional increases.
Coconut (Desiccated, Toasted and Sweetened)
Coconut prices have increased despite slower than usual demand during the recent Easter season due to stay-at-home orders for most of the country and even world. Shipments from the Philippines have been sporadic with problems getting containers from this port. Recent environmental issues have also reduced the amount of product that is available from origin. Expect prices to remain firm for at least the next few months.
Dairy Market (Buttermilk and Whole Milk Powder)
Dairy prices have been firm but have recently begun to ease as there is plenty of supply. At this time the logistics of getting dairy and dairy powders to market are a big issue as milk consumption has changed. Coronavirus has impacted dairy usage due to school and restaurant closures and significantly altered grocery buying trends. Look for prices to remain stable at current lower levels for the near future.
Caraway prices are stable at very favorable levels.
Poppy prices increased in the first quarter of 2020 and are now firm. However there seems to be enough available product. Prices for the second half of 2020 will depend primarily on this year’s harvest and potentially high logistics costs.
Sesame (Natural and Hulled)
Sesame prices are stable to firm now but a recent typhoon could result in higher prices depending on crop and/or infrastructure damage. Any major weather-related issues should be apparent in the next couple of weeks. There has also been an issue with port closures and delayed freight due to the coronavirus outbreak.
Sunflower, Millet and Flax
Sunflower, Millet and Flax crops were delayed and poor U.S weather conditions during harvesting reduced available product. Sunflower prices have remained stable as imported product has kept supply up to demand. Millet and flax prices have risen with a shortfall of available supply, look for firm millet and flax prices until late 2020.
Cinnamon — Cinnamon prices remain firm as prices increased early this year and there is no relief in sight. As prices have been high and have been trending higher for the last 2-3 years hopefully more product will begin to come to market in the future as cinnamon in now much more profitable to grow.
Vanilla — Vanilla prices remain high and with continued strong demand there is little reason to expect any easing in the market. Many users have moved to various types of imitation and/or blended products but pure vanilla remain a very expensive commodity.
Garlic Domestic / Imported
Garlic prices are stable to firm and as this is primarily a Chinese export we’ll have to see if there are additional coronavirus issues.
Onion prices as usual are fairly stable with favorable weather. Transportation costs are firm from California despite lower fuel costs due to a shortage of available trucks.
Corn prices have come down with reduced export demand in the first quarter of this year. As worldwide demand improves (hopefully) we will likely see some firming of prices as current levels are very low. Low fuel costs have also reduced demand for corn used for ethanol production.
Almonds — Almond prices are easing as early forecasts for this year’s harvest are very strong. With reduced Q1 exports the carryover although not huge should be more than originally expected putting further pressure on prices into the summer.
Pecans — Pecan prices remain stable as supply/demand seems well balanced at current levels
Walnuts — Walnut prices had firmed in 2019 and levels remained fairly high into 2020. However with a big crop likely coming in September prices are easing. Export figures for the next 2-3 months will have a big effect on walnut prices into the fall but lower prices are expected.
Raisin prices remain low as many large users are now more open to using imported product after being forced to try it last year due to prices from California. Prices are likely to remain low as there should be plenty of both domestic and imported product available through the end of this year and beyond.
Hopefully the worst of the coronavirus pandemic is behind us but at this time no one knows for sure. Sparrow remains diligent in policies and procedures to keep our employees and all of our partner’s safe, from truckers to end users. Please join us with continued strong efforts to get this thing behind us so we can get back to “the new normal”. One last note, this year’s IDDBA expo has been cancelled so we look forward to seeing everyone next year in Houston for what should be an excellent and very busy IDDBA Expo.
The Sparrow Team